Hail To the Geek

In the early nineteen-thirties, as the American economy fell to pieces, policymakers in Washington had a serious problem: they had no idea what was happening. They knew that things were bad, but they didn’t know how bad, because they had almost no dependable information about the economy as a whole. So Congress, the White House, and the Federal Reserve Board were stuck scrutinizing such thin indicators as steel production, stock prices, and the public pronouncements of Henry Ford.

That changed in 1933, when a small staff of government researchers, led by an economist named Simon Kuznets, came up with a new statistic, which they called “national income.” Though crude by modern standards, it was the first reliable measure of national economic performance in American history. Within a few years, the Commerce Department had invented the gross national product and had started analyzing the economy by industry and region, while other agencies were devising ways of tracking inflation and unemployment. Today, the government provides as much solid, objective economic information and analysis in a month as it used to in a decade.

This steady flow of data is easy to take for granted; few things, surely, are as dreary as a soybean-export-price index. But the economy depends on these numbers; they make business smoother and policy smarter. (Recessions after the Second World War, for instance, have lasted about half as long as recessions before it.) This is why, ever since the days of Kuznets, the government’s basic assumption, at least when it comes to economic data, has been: the more information, the better, no matter how dismal it may be.

The Bush Administration has adopted a different approach: what you don’t know won’t hurt you. Consider Thomas Scully, who was, until recently, the head of Medicare and the point man in the White House’s effort to get its drug benefit through Congress. Last spring, Richard Foster, Medicare’s chief actuary, analyzed the Bush proposal and estimated that it would cost five hundred and fifty billion dollars over a decade: roughly a hundred and fifty billion more than the President had said it would. Scully, knowing that Congress was already leery about the price tag, and that Foster’s estimate might sink the bill, made sure that the numbers never got out. As Foster recalls it, Scully said that he’d fire him if they did. Foster kept his mouth shut, and the bill passed the House by one vote. Last January, the Office of Management and Budget issued its own estimate, which echoed Foster’s. The bill is expected to cost well over five hundred billion dollars.

Statistical expediency and fiscal obfuscation have become hallmarks of this White House. In the past three years, the Bush Administration has had the Bureau of Labor Statistics stop reporting mass layoffs. It shortened the traditional span of budget projections from ten years to five, which allowed it to hide the long-term costs of its tax cuts. It commissioned a report on the aging of the baby boomers, then quashed it because it projected deficits as far as the eye could see. The Administration declined to offer cost estimates or to budget money for the wars in Afghanistan and Iraq. A recent report from the White House’s Council of Economic Advisers included an unaccountably optimistic job-growth forecast, evidently guided by the Administration’s desire to claim that it will have created jobs. And a few weeks ago the Treasury Department put civil servants to work—at Tom DeLay’s request—evaluating a tax proposal identical to John Kerry’s, then issued a press release saying that the proposal would raise taxes on “hardworking individuals.” (Lazy individuals breathed a sigh of relief.)

Politics as usual? Not really. Hard as it may be to believe, in economic matters the executive branch has traditionally succeeded at hewing to the ideals of objectivity and nonpartisanship. Under Republicans and Democrats, in good times and bad, the Commerce Department and the Labor Department have produced reliable numbers, even when those numbers have made sitting Presidents look worse. Presidents have tried to put their spin on the data, of course, and there have been notable episodes of deliberate manipulation, as when Lyndon Johnson moved the Social Security Trust Fund into the general budget, or when David Stockman fabricated numbers in the first Reagan budget. On the whole, though, good economics has trumped politics.

The people who have made this possible are among the most heavily scorned figures in American life—George Wallace’s “pointy-headed bureaucrats.” Career civil servants are easy targets: protective of their bailiwick, certain of their indispensability, diminished by their sinecure. But what makes them assailable also makes them valuable. They’re the only professionals in government—the only ones who can say what they think instead of what they believe their bosses or voters want them to. Their long tenures foster expertise and make nonpartisanship possible. Would we trust the unemployment numbers if, every time a new President came along, he replaced the entire Bureau of Labor Statistics with a new crop of cronies and campaign aides?

With the military, we expect colonels and lieutenants to be indifferent to the exigencies of party politics, so that they can, as the saying goes, just do their jobs. We don’t want them to be ward heelers. The same should hold true for government actuaries and economists. When Foster looked at the cost of the drug bill, he was trying to figure out what was true. Scully, meanwhile, was trying to figure what he could sell. Politics may need people willing to ask the second question, but government needs people willing to ask the first.

James Surowiecki is the author of “The Wisdom of Crowds” and writes about economics, business, and finance for the magazine.